FCA announces proposals for further support to consumer credit borrowers

The Financial Conduct Authority (FCA) has announced proposals for further support to consumer credit borrowers impacted by coronavirus.

In September, the Financial Conduct Authority (FCA) announced tailored support for borrowers affected by coronavirus (Covid-19) after 31st October, which it would keep under review as the pandemic evolved.

As a result of increasing restrictions announced in recent weeks, the FCA is proposing to enhance these measures to provide further support to consumers impacted by coronavirus.

The FCA proposes to extend payment deferrals and other support to personal loans, credit cards, motor finance, rent-to-own, buy-now-pay-later and pawnbroking customers who are experiencing payment difficulties because of coronavirus.

Sheldon Mills, Interim Executive Director of Strategy and Competition at the FCA said “We recognise the challenges that many consumers face as the coronavirus crisis develops, and we are working to ensure support remains available to consumers who need it.”

“We know that many consumer credit borrowers are vulnerable. That’s why tailored support reflecting borrowers’ individual circumstances will still be offered and remains the most appropriate option for many. We are also proposing to extend payment deferrals for some consumer credit products to offer additional support.”

“It is in borrowers’ own long-term interest only to take a payment deferral when absolutely necessary. Those that are able to keep paying, should do so.”

“We are also asking borrowers not to contact their lender yet, and instead wait for further updates, including from their lenders, soon.”

The FCA is working closely with trade bodies and lenders to make sure the enhanced measures come into effect as soon as possible, and consumers receive the information they need.

Commenting on the announcement Eric Leenders, Managing Director of Personal Finance at UK Finance, said “Lenders continue to provide unprecedented support to borrowers impacted by the Covid-19 crisis and are working closely with the FCA to ensure customers continue to receive the help they need.”

“It will always be in the long-term interest of customers who are able to do so to resume making payments, but for anyone who is still struggling ongoing support will be available.”

“This could include the option of further payment deferrals on credit cards and personal loans in some circumstances or providing more tailored support where appropriate.”

“Customers seeking to access this support do not need to contact their lenders yet and should wait for further updates on how to apply once these measures have been finalised.”